Restaurant Brands Shares Gain in Wellington After First-Half Profit Jumps
Restaurant Brands New Zealand Ltd., an owner of KFC, Pizza Hut and Starbucks franchises, rose the most in a month in Wellington trading after it said first-half profit gained 52 percent.
Net income rose to NZ$13.5 million ($10 million) in the six months ended Sept. 13 from NZ$8.9 million a year earlier, the Auckland-based company said in a statement. The stock rose 2.4 percent, the biggest gain since Sept. 21.
Restaurant Brands’ share price has jumped almost 54 percent since Jan. 1, becoming the best performer on the benchmark NZX 50 stock index. The company increased its first-half dividend to 7 cents a share from 4.5 cents and reaffirmed that full-year profit excluding non-trading items will rise to a range of NZ$24 million to NZ$26 million.
Second-half earnings are likely to match the year earlier because “consumer sentiment is not bullish,” the company said. The full effect of the Oct. 1 increase in sales tax and income tax cuts has yet to work through into consumer spending.
The stock rose 6 cents to NZ$2.58 as at the 5 p.m. market close in Wellington. Earlier, it climbed as much as 5.2 percent, the biggest gain since March 4.
First-half sales rose 3.9 percent to NZ$176.6 million, the company said. Earnings before interest, tax, depreciation and amortization gained 23 percent to NZ$34 million.
Sales at the company’s 87 KFC stores, which contribute 72 percent of group revenue, rose 7.5 percent. KFC’s operating earnings increased 20 percent and are expected to grow further in the second half, the company said. The Pizza Hut and Starbucks units face rising input costs which may curb margin growth, it said.
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